When will Disney World and Disneyland reopen? One analyst predicts it may not be until 2021

Jayme DeerwesterUSA TODAY

Wednesday

Apr 22, 2020 at 8:41 AM

A financial analyst made headlines Monday when he predicted that Disney World, Disneyland and the company's overseas properties won't be able to reopen until January 2021.

John Hodulik, the managing director of investment research at global financial firm UBS, estimated that health and economic concerns would keep the parks closed through 2020 in his report, titled "The Eye of the Storm."

"We believe Parks' profitability will be impaired for a longer period of time given the lingering effects of the outbreak and now assume an opening date of Jan. 1 as our base case," Hodulik wrote. "That said, the economic recession plus the need for social distancing, new health precautions, the lack of travel and crowd aversion are likely to make this business less profitable until there is a widely available vaccine."

Disney, which is preparing its quarterly report for publication in early May, has not commented publicly on Hodulik's report and did not respond to USA TODAY's inquiry. In its statement about the U.S. parks' status in late March, the company said Walt Disney World in Orlando, Florida, and Disneyland in Anaheim, California, would both remain "closed until further notice."

Hodulik's report followed the third downgrade of Disney's stock price this month. In a copy of his report, which he provided to USA TODAY, Hodulik cut his target price from $162 to $114. In it, he also noted that the parks segment of the company's projected quarterly earnings contained the most revisions.

Hodulik hypothesized that the two American parks might be able to “regain their recent operating cadence in (approximately) 18 months." That is on the long end of the timetable presented by Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases. In early March, Fauci anticipated it would take a year to a year and a half to test and mass-produce a vaccine.

While Hodulik acknowledged that "officials at the federal and state level are working on ‘opening’ the economy,' " he anticipated it will "happen in stages, with stadiums and theme parks low on the list."

J.P. Morgan analyst Alexia Quadrani presented a more optimistic outlook, predicting that Disney could reopen its U.S. parks as early as June.

"We’re assuming the parks will open on June 1," she told the financial news site Barrons. Quadrani based that assumption on a several factors, including when the lockdown and social distancing might become less stringent. "It’s also the date that Disney is accepting reservations," she said. "If you call up and you want to book a hotel at Disney World, that’s the first date you can book: June 1."

However, Quadrani also believes that attendance will be "pretty weak" initially, pointing to the travel bans that remain in effect, as well as the closure of the U.S.-Canada border to nonessential travel.

"First off, you have to take the international attendees," she noted, estimating Disney World's international visitors account for about 20% of its overall annual attendance. "I think you have to assume those are not going to be the first ones who come back to Disney World. And I think there will be consumers who are financially strapped, given the economic situation we’ll be in."

"I do think there’s a lot of interest in folks coming back," she said, pointing to the large crowds on the last weekend the parks were open in March. "But you can’t assume it goes back to normalized capacity for quite some time."

The Trump administration's coronavirus task force presented a three-phase plan for reopening the nation's economy last week. The National Governors Association is expected to release its own guidelines on Wednesday.

Meanwhile, executives from Disney and Universal Orlando have been named to a "Re-Open Florida" task force by Gov. Ron DeSantis, who is eager to restart the Sunshine State's economy, where both parks have a major footprint.

California Gov. Gavin Newsom said his state will evaluate six criteria before relaxing its stay-at-home order, which has been in effect since March 19. Those factors include adequate testing and contact tracing, an assurance that the health care system can handle new surges in infection and a plan for reinstating the stay-at-home order if needed. He is also coordinating efforts with his counterparts in Oregon and Washington State.

“COVID-19 doesn’t follow state or national boundaries,” Newsom, Washington Gov. Jay Inslee, and Oregon Gov. Kate Brown said in a joint statement Monday. “It will take every level of government, working together, and a full picture of what’s happening on the ground.”

Walt Disney World and Disneyland have been closed since mid-March. Before the end of the month, the company extended the shutdown of both parks "until further notice."

In early April, both parks stopped billing annual passholders. Park employees were furloughed beginning April 19.

Disneyland Paris, which also closed in mid-March, remains closed until further notice as well.

Tokyo Disneyland has been closed since late February, when the Japanese government closed schools in an attempt to slow the spread of the virus there. Since then, two reopening dates have come and gone. An April 14 statement on the park's website said officials will reassess the situation there in mid-May.

One of the first Disney parks to close, Shanghai Disneyland Resort, partially reopened on March 9 as the virus began to abate in China, the country where the pandemic began late last year. However, Hong Kong Disneyland, which shut its gates the same week as the Shanghai resort, remains closed.